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Things to Consider Before Buying Insurance

What is the first thing which comes to your mind when we talk about insurance? Isn’t it a security and returns? These benefits can be achieved only if you identify that what type of insurance policy is most suitable for you. The leading insurance companies in the market try very hard to offer top quality services to their customers. The rivalry among insurance companies actually helped customers to avail maximum insurance benefits in lower prices. However, it is extremely crucial from customer’s point of view that funds should be invested only after verifying all the financial aspects properly. Here is a list of some important things you must consider before taking a crucial decision of purchasing insurance –

Identify your own needs

The first and foremost thing is to identify your own insurance requirement. It is extremely essential to understand the type of insurance cover you are looking for. You also have to consider minimum insurance cover requirement which is specified by your state law. You can avail all these details on sites of different insurance aggregator. If you are looking for health insurance then opt for an insurance provider who will modify insurance policy according to your own needs such as hospital bills, third party coverage and pre-existing illnesses.

Background Check

It is necessary that you gather all the necessary details about performance of your insurance provider. You can take help of online forums to get proper feedback on financial standing and service pattern of your insurance company. You can also get in touch with the existing customers of the insurance company who will provide genuine feedback regarding product, services and customer support provided by the company.

Shop Around

Don’t purchase insurance policy from the first company you come across. It is recommended to shop for quotes with various companies available in the market. You can compare quotes along with features offered by each company before short listing any one out of those. Most of the online shopping destinations offer comparison between features and prices of multiple insurance companies at single platform. So you can take help of these online portals to do thorough analysis.

Assess your Risk

If you are enrolling for business insurance then insurance companies analyze the level of risk attached to your business. The level of risk depends on many factors such as format of your business, fire protection services installed, business location and amount of insurance coverage you are looking for. If there is extremely high risk involved in your business then insurance company may skip some of the benefits requested by you in the insurance policy. The higher your business risk, the more premium you have to pay for insurance coverage.

Purchase insurance policy online

If you are worried about the tedious process of buying insurance policy then opt for online mode of purchase. You can save significant amount of money and time if you purchase insurance policy online. You can access websites of insurance company at any time to compare different plans and policy premium to take an informed decision. One more advantage of online insurance purchase is that you can check your fund value and access your account statement regularly during your insurance tenure.

Read the fine print of policy

It is frequently observed fact that most of the customers ignore reading fine print of their policy. It is necessary that you should read all the terms and conditions carefully. Most of the disclaimers are covered under this fine print which you should never miss reading. It is also important to understand insurance terminologies mentioned in your insurance policy. If you are doubtful on any details in your policy then you can get in touch with your insurance advisor to clarify the things.

Apply at right time

If you are opting for health insurance then apply for it when you are healthy. Most of the health insurance policies such as disability insurance ask you to go through medical underwriting. Your insurance company may review your medical records before allocating you sufficient amount of insurance coverage. If you are suffered from any pre-existing illnesses then you may have to bear higher premium charges in order to cover those ailments in your insurance policy.

Don’t choose policy on price alone

One important thing you must aware of is that the price of your insurance policy mainly depends upon the benefits and features attached with it.  If you are business owner then you can consider enrolling for group coverage for your entire staff with a plan which doesn’t demand medical history.

Honesty is a best policy

When you are asked to provide all your personal, financial and medical details then don’t hesitate to submit genuine information. Holding back any important details may result in non-payment or delay of claims to your nominees in later stages. Providing right details at right time to your insurance company will definitely help you to avail customized insurance plan that will provide features according to your own needs.

Add insurance Riders

If you are applying for health insurance policy then you can consider adding insurance riders along with your existing policy to avail comprehensive cover. These riders mainly include critical illness, premium waivers and accidental benefits. Tax benefit is one more remarkable feature which an insurance holder can avail along with these riders. But always remember the key objective of insurance is to protect your loved ones and tax saving is only a supplementary thing.

Manage your policy

Once you have completed reading fine print of your insurance policy, you can keep it along with your other important financial documents. But don’t store it in a safe deposit box. This is because after death of policyholder, boxes are sealed by bank for temporary period of time. This could delay your nominee’s access to the insurance benefits. Reviewing your policy is one thing you have to consider from time to time, especially when any major life events happened in your life.

Opt for Life Annuity Cover

If you want to make life term provision for your loved ones after your death then life annuity is an ideal choice you must opt for. Life annuity allows the insurance benefits to be transferred to the nominees as long as they are alive. Though life annuity provide low amount of payment every month, but it offers a source of steady income to those who wish to complement their income when they get old.

Conclusion

Most of the people are able to avail insurance from their employer sponsored group plans and in many cases, this is an ideal route. However, not all insurance plans provided by your employer are comprehensive and you may need to enroll for supplementary insurance plan to make sure that you and your entire family are adequately covered.

The bottom line is that insurance plans play vital role in protecting you and your family members from any devastating future expenses. The simple things mentioned above will not only help you to purchase an apt insurance policy but it will also play vital role in managing your finances for long term.

 





One response to “Things to Consider Before Buying Insurance”

  1. Baron says:

    That was really a very useful write-up. I will consider these things when I will buy insurance for my family in coming time. Keep posting more such write-ups on investment topics.

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